The prices for most condos on the orange line in Arlington County will come down significantly now that there are several smokin' hot new condos that have delivered such as the Odyssey & Clarendon 1021. To see my explanation check out the blog.

J

In response to Alby, yes as a Realtor it is my duty to be honest with my clients. If a client says that they want to put their home on the market for a price that is higher than what the market will likeyl bear.. I have a duty to inform them of just that. The price is too high for this market and the client should reconsider.

There are reasons why some of those clients cannot take less than the price they have in mind. However if they hire me to represent them and wish to allow me the opportunity to market the home, they will understand that there is a real cost to do so that I must pay for (they ultimately do from their proceeds but still, if I don't sell the home I'm the one out of the funds spent on the marketing efforts as I only collect any fee from the successful close of escrow).

If I've negotiated a fee based on percentage, I want to sell the home for the most amount of dollars as possible. And you bet, if I knew that it was possible to get 20 points higher of a price I'd make more money for my services.

So tell me, what is more ethical... telling a client the actual market conditions for a likely successful sale that is lower than perhaps what the client had in mind, or just saying yes to them and their demands for the price they have in mind??

Who is the professional?? The client or the agent??

John: I try not to spin reality one way or the other. Just the facts and how to deal with them. An unwinding of the housing rush of the last two years is a good thing. If you owned your home for at least 2-3 years, a 10-20% price adjustment is still a gain. I also tell potential sellers if you don't have to sell, don't. I would tell buyers in the market: take advantage of the high inventory, find your dream home and make a deal. Sellers that "have to sell" are capitulating.

Thanks for the comments and becoming a reader of the Guide.

jf: Go for it!

With all my preoccupation with zillow posts I almost missed this gem. Wow. Excellent Merv. Do you mind if I incorporate some of it in my next unzillowable post :)?

Finally, an honest real estate agent.

When the NAR published "anti-bubble reports" last fall to provide member agents with talking points they could use to convince prospective buyers there was "no possibility" of a housing bust in any of 135 of the largest cities and that there was never a better time to buy a house than now, I gotta tell you I felt sick. It was dishonest and unfair to the buyers who were fed the "anti-bubble" info and encouraged to buy at any price.

The fact that you admit there is a chance of a price correction sets you far apart on the ethical scale from most agents who have been perinnial cheerleaders for ever higher home prices (the "this time it's different" crowd).

Merv, you might just become a superhero of sorts to lots of future buyers for doing what agents should be doing - being honest.

FYI, I am a former homeowner who sold last summer when the market offered me twice the amount I thought my home was worth (based on rents). I couldn't help but say yes to the money. I am firmly in the bear camp on the future of home prices in NoVA (50% inflation adjusted price drops - even more drastic than most bears).

Harriet, I love it when I hear people really enjoy this thing I do. You made a timely decision. When rental prices get back to the cost of home ownership (or more), then maybe we will be back to normal. What is interesting to watch is the rental market. It is also a RENTERS market nor too. I don't officially tract the statistics but from everything I see, renters have a lot to choose from. Not so just a couple of years ago. Rental prices are falling too. Hard to understand what is really going on because the local economy appears to be doing just fine. Look forward to your future comments.

PS: See your first comment on Letter From a Seller. I had to recreate it because I deleted it inadvertantly among a bunch of blog comment spam.

Merv great site you have here. I got here from a link posted on thehousingbubbleblog.com. I have been one of the growing number of regulars over there that have been discussing this bubble long before most acknowledged that there was the possibility for real estate prices to decline nationally.

It is interesting to get the perspective of RE professionals on the front lines as this starts to unfold. The jury is still out on how well individual areas will weather the storm but the days of denying the storm exists seems to be quickly coming to a close.

I'll be sure to spread the word about your useful observations/stats and I'll check back often. Thanks!

Sue...Disco...great on-line name! Oh, market slipping? See my comments to mvm. In reality, it like trying to predict the weather...bad example...the stock market? I do know that from Economics 101 that when there is more supply than demand, prices come down. We just can't know by how much.

mvm, none of us has the highly sought after crystal ball. But, I don't think it would be unreasonable to think prices roll back 10-15% in the next 12 months. I could be wrong. On the other hand, trying to time the market highs and lows is somewhat foolish in my mind. Buy a home for the right reasons...your lifestyle as well as the financial benefits. If you plan to be in a home for more than 5 years and then, break even on a sale, just think of the tax benefit you enjoyed the entire time. Real estate is not stock.

Alby, Hmmmmmm...not sure what point it proves. Sellers have a right to ask whatever they want. Buyers have a right not to buy at the seller's price. Agents have a duty to a seller to advise them that their price won't sell. Agents also have a right to not do business with sellers that can't understand the market dynamics. I would like to think the vast majority of us are honorable people. Some are not and out to make a buck. It is a stressful time for all involved. I hope we can redefine normal soon. Then it is back to the basics and who does them the best.

This is proves my point, agents aren't looking out for their clients. A client who wishes to sell their property has the (RIGHT) to ask whatever price they want. These agent comments (ie: "Only take a listing if the seller is willing to set their price at least 5% below anything that has recently sold around them."), says loud and clear, agents are trying to low ball asking prices to make a sale, instead of trying to sell the property for what the seller wants.

I do understand where the agents are coming from. They have marketing expenses in their attempts to sell a property. The longer the property goes unsold, the more expenses the agent incurs.

It is a terrible time for Agents and Sellers. Personally, I'd be happen if more agents dropped Sellers (assuming I didn't get dropped), so the available inventory fell and caused a tightening of the housing supply. Or better yet, the Real Estate Cartel should require $1000 from Sellers. That'll reduce the inventory supply..

I read your blog every other day for new data. Thanks so much for valuable information!

i want to get into my first home within next march, unless it is stupid to buy in this market. i am looking into townhome market in herndon/reston. i have been watching real estate market and seems like the prices there are now down +-5%. can we expect the prices to fall back another 15%? please advise.

Great blog! Based on prices now, how far do you see the market slipping? I've heard so many opinions...from 5% to 25%...I'm curious what you think.

Thank you for this timely and fun web site. I've been studying our local market (Fauquier) for over a year now. (Literally looking at listings every day and following the local and national market as best I can). We sold last Spring and are renting the same type of house for 1/2 the cost. It was then that I started reading Ben Jones' blog and it really made sense, and as we're a one-income family (for now) we decided we'd rather have the cash in the bank than in our house.